Coinbase executive David Duong recently asked, “Is ETH 2.0 the real ‘Ethereum Killer’?” In his report titled, he mentioned the future of the leading altcoin project.
Coinbase assesses 2022 for its leading altcoin project
In a detailed market report, Coinbase’s head of institutional research, David Duong, says Ethereum is at a critical juncture as it faces pressure from both ETH 2.0 launch attempts and other projects:
In the first half of 2022, we can see continued growth of alternative layer one networks and bridges connecting them with Ethereum. However, the window of opportunity for tier one alternatives may begin to narrow significantly in the second half of 2022 as we expect ZK [zero knowledge] evidence technology to evolve and aggregations gain more widespread use.
The report highlights how the high cost of using the Ethereum protocol has negatively impacted its widespread growth, but also mentions that there is still a significant amount of development using ETH:
Gas fees on the Ethereum network have been one of the biggest barriers to mass adoption of both ETH and smart contract platforms in general. This is one of the reasons why layer-1 alternatives such as Solana (SOL), Avalanche (AVAX) and Terra (LUNA) are gaining a lot of attention in 2021. Still, the majority of active application development in layer one networks takes place on Ethereum with a total value of $156 billion across 214 projects.
Transition to ETH 2.0
Coinbase analysis concludes by saying that Ethereum’s transition to PoS will likely result in less ETH being issued and then sold to miners, but will not have any impact on Bockchain’s functionality. The report doesn’t see any clear winners emerging this year:
However, we think the culmination of Tier-2 scaling solutions coupled with Beacon Chain and upgrades such as sharding may limit progress for alternative Tier-1s in their current form. As ETH scalability improves, DApp users, for example, may avoid looking for faster and cheaper alternatives to Ethereum. However, we think there will still be room for multiple blockchains to coexist in the crypto space in the near term, which is facilitated by the possible need for interoperability and alternative consensus mechanisms.
